VOLVO President and CEO Hans-Olov Olsson wants the Swedish carmaker to grow dramatically over the next several years. Volvo will enter new segments, including ones that will challenge the strength of its brand. The 60-year-old Olsson picked 'ReVolvolution' as the rallying cry for his strategy. He spoke to Automotive News Europe reporter Mark Rechtin.
How have the terrorist attacks of September 11 affected Volvo?
Our sales are still up and we're looking at another record year. Yes, our incentives have been boosted, as we have had to stay competitive. But no, we are not looking at zero-percent financing. And our incentives are only on leftover stock.
How big can Volvo get globally?
Last year we sold 422,000 cars and this year our ambition is 430,000. Long-term it is 600,000, so I think Volvo has not reached the volume level of being categorized as a mass manufacturer. If you run below 1 million units, you are still not looked upon as a mass manufacturer.
Is it wise for Volvo to expand downmarket and chase the Audi A2 and Mercedes-Benz A class?
Time will tell. We certainly believe there is a potential for the Volvo brand below the P1 project [the S40 and V40 redesign]. How big it is and how we utilize it, that's too early to tell. To go small is so obvious, because the foreign car market is downsizing, so you follow the trend in the marketplace. That's a safe one.
Similarly, can Volvo successfully challenge Mercedes-Benz, BMW and Lexus in the premium market?
There is always debate whether Volvo should take on the luxury sedans, or whether that's the territory of somebody else. Don't misunderstand me, we will not aim for the Mercedes S class or something. No, no. We have to find new definitions, we have to have imagination. We have to challenge ourselves because we are in a saturated market. We have to take the risk and see if we can attract the same people in another direction.
Is it possible to promote safety without being boring?
If you see what we're trying to do with the Safety Concept Car, the response has been enormous. I think the Safety Concept Car has been able to overcome this image of safety being boring and functional and rational. The [see-through] A-pillar is my favorite feature, but you have all the electronics too. But the A-pillar is something everyone can utilize without thinking too much.
How is Volvo doing as part of Ford and its Premier Automotive Group of luxury brands?
There are big expectations for Premier Automotive Group within Ford. Times are getting tougher. Ford expects us to support the overall business plan when the Blue Oval is having a hard time, particularly in North America. We have to try to step up to the expectations.
When it comes to Volvo, we have been doing very well and continue to do well. We've seen profit growth for three [fiscal years], in 1999, 2000 and 2001, and we're planning for an even better 2002.
The relationship of Volvo within Premier Automotive Group is important because we represent half the volume. When it comes to Volvo's relationship with Ford, it's simple. If we deliver to expectations, that means we safeguard Volvo and its independence in a way that the Volvo organization should look after itself.
Volvo has its origin among 27,000 people employed and sourced in Sweden, and it's hard to move it to somewhere else, or else Volvo would disappear.
The benefit of being with Ford is in having access to economies of scale. For instance, having access to common platforms or components is crucial. We can react much quicker to market demands. We can also utilize commonality with economies of scale and building in reliability and quality.
How does Volvo fit into Premier Automotive Group alongside the other global brands - Jaguar, Land Rover and Aston Martin?
Premier Automotive Group is a unique thing in the car industry, where we have five distinct brands [the other brand is Lincoln] with three national cultures from a people and car point of view. No one else has that and can combine it. We have an opportunity to be creative, harmonize ourselves, channel ourselves, integrate, benefit and learn from the Swedish, British and American cultures and be under the same umbrella. It's not such a big organization. We talk and have dialogue.
After years of boxy cars, are you getting any resistance from owners who don't like Volvo's new look?
In the past, we certainly absorbed the criticisms that Volvo is boxy and boring. But when we left it, people said, 'Oh, no. Volvo should be boxy.' But with this new design language, we are confident we have found something that is true Volvo and still has a Scandinavian touch. There are unique features in the shape of the car, yet it always will have the front grille. You immediately see it as a Volvo. And in the interior, you will say this is Volvo. When you look at design, and how it evolves with the C70, S70 and Safety Concept Car, you start to realize Volvo has a unique design pattern with a very clear Volvo look.